Financial Performance - The group recorded revenue of approximately HKD 230.6 million, an increase of approximately HKD 50.2 million or about 27.8% from HKD 180.4 million in the previous year[9]. - The after-tax profit was approximately HKD 66.2 million, a decrease of about HKD 7.1 million or approximately 9.7% compared to HKD 73.3 million in the previous year[9]. - Revenue for the reporting period was approximately HKD 230.6 million, an increase from approximately HKD 180.4 million in the same period last year[22]. - The annual profit decreased from approximately HKD 73.3 million for the year ended December 31, 2023, to about HKD 66.2 million, a reduction of approximately HKD 7.1 million or about 9.7%[45]. - The total comprehensive income for the reporting period was approximately HKD 20.3 million, down from about HKD 37.2 million for the year ended December 31, 2023[45]. - Revenue from wastewater treatment operations rose from approximately HKD 64.6 million to approximately HKD 113.5 million, an increase of about HKD 48.9 million or approximately 75.7%[33]. - The gross profit increased from approximately HKD 114.1 million to approximately HKD 176.1 million, an increase of about HKD 62.0 million or approximately 54.3%[37]. - The gross profit margin improved from approximately 63.2% to approximately 76.4%[38]. Operational Performance - The total sewage treatment volume during the reporting period was approximately 78.7 million cubic meters, a decrease of about 1.7 million cubic meters or approximately 2.1% compared to the previous year[8]. - The total daily wastewater treatment capacity is 375,000 cubic meters following the cessation of operations at the first treatment plant[22]. - All wastewater treatment plants achieved Class A discharge standards (275,000 cubic meters per day) and Class IV water standards (100,000 cubic meters per day)[22]. - The company actively complied with all national policy discharge standards and parameters during the reporting period[22]. - The company has not encountered any significant quality issues or interruptions in its wastewater treatment services during the reporting period[22]. - The company is focused on upgrading and expanding wastewater treatment facilities to meet higher discharge standards and increase design treatment capacity[22]. - The company aims to enhance operational efficiency and cost optimization in managing sewage treatment plants[13]. Future Outlook - The company anticipates challenges in the upcoming year due to the ongoing slowdown in the Chinese economy and geopolitical tensions, but maintains a positive long-term outlook as a long-term concessionaire[10]. - The group expects the sewage treatment industry outlook to remain optimistic, leading to a cautiously optimistic financial performance for the fiscal year ending December 31, 2025[14]. - The company plans to focus on finalizing new water pricing and basic water volume agreements with local authorities, which are expected to positively contribute to revenue[12]. - The company is actively seeking potential acquisitions of sewage treatment assets in Yinchuan, Ningxia, and other regions in China to strengthen its business presence[14]. Financial Position - Trade and other receivables decreased from approximately HKD 383.1 million as of December 31, 2023, to about HKD 343.5 million, a decline of approximately HKD 39.6 million or about 10.3%[48]. - Cash and bank balances increased by approximately HKD 43.6 million or about 48.4%, from about HKD 90.0 million to approximately HKD 133.6 million[50]. - Total borrowings decreased by approximately HKD 91.1 million or about 12.8%, from HKD 713.2 million to about HKD 622.1 million[52]. - The debt-to-equity ratio improved to approximately 35.4% as of December 31, 2024, compared to about 45.8% as of December 31, 2023[54]. - As of December 31, 2024, the company's distributable reserves amount to approximately HKD 593,460,000, a decrease from HKD 601,263,000 in 2023[82]. Corporate Governance - The company aims to maintain high levels of corporate governance to protect shareholder interests and enhance corporate value and accountability[123]. - The board has adopted a statement regarding the company's purpose, values, and strategies, emphasizing a strong culture for long-term business success and sustainable growth[125]. - The board consists of six directors, ensuring a balanced composition with rich corporate and strategic planning experience[140]. - The company has established a whistleblowing policy to encourage stakeholders to report misconduct confidentially and anonymously[194]. - The board has established three committees: Audit Committee, Remuneration Committee, and Nomination Committee, with defined responsibilities[168]. - The company has implemented monitoring procedures to ensure compliance with laws and regulations and to safeguard assets from unauthorized use[186]. Risk Management - The board has established a comprehensive risk management policy to identify, assess, and manage operational risks[138]. - The company has a robust internal control and risk management system to provide reasonable assurance against significant misstatements, losses, or fraud[128]. - The company has no internal audit function and currently believes there is no urgent need to establish one given the scale, nature, and complexity of its operations[186]. - The risk management policies and internal control procedures will be revised in response to any significant changes[189]. Shareholder Information - Over 90% of the company's revenue comes from its largest customer, Yinchuan Construction Bureau, posing a significant risk if the concession agreement is terminated[71]. - The company has a 30-year fixed-term concession agreement with Yinchuan Construction Bureau, ensuring stable cash flow as long as it meets the required wastewater treatment standards[78]. - The company did not recommend the payment of a final dividend for the year ending December 31, 2024[68]. - Major shareholders hold 750,000,000 shares each, representing 75% of the company's shares, including Lim Chee Meng and related entities[103]. Compliance and Quality Control - The company has implemented various quality control measures to ensure compliance with environmental laws and regulations in its operations[74]. - The quality control team is responsible for laboratory analysis of influent and effluent wastewater to ensure compliance with standards[132]. - The company has not faced any sanctions or penalties for non-compliance with health and safety laws during the reporting period[73]. - The company has a zero-tolerance approach towards bribery and corruption, ensuring high standards of business integrity[190].
达力环保(01790) - 2024 - 年度财报